So, you are running out of space… What do you do now?
The first thoughts are often to find more space somewhere outside your existing building. You can consider options such as: Putting on an addition to your existing building; Relocating to a larger facility; Using a logistics or fulfillment company to outsource a part of your operation to another location. All are reasonable options and one may be the best alternative for you. However, you should always evaluate the simplest and easiest option first.
You should FIRST look at optimizing your existing space.
There are very few warehouses, stockrooms and manufacturing facilities that are using their space to maximum efficiency and there are a few basic ideas that you can review quickly to see if there opportunities within your own facility to ‘find’ space that is not being used. It may look bad at first, but there are ways to find space in almost any building.
Here are a few of the basic ways to reclaim storage space:
1. Discard or Sell Off Obsolete Inventory
Look at your slowest moving items and compare the profit generated from sales or use of these items to the cost of acquiring new storage space to keep them. Ask yourself if you would you build, buy or rent new space just for these items? If the answer is , “No,” consider selling these items at a discount or just disposing of them.
2. Review Your Stock Level Policies
Purchasing policies should be examined for opportunities to reduce on hand inventory by: reducing overstock levels; making smaller but more frequent purchases; or using vendor monitored just-in-time stock level programs.
3. Consider Upgrading Inventory and Order Picking Software Systems
Newer software systems allow you store items in the most efficient manner, with similar sized items stored together, rather than using a strict numerical sequencing of products or category grouping. This allows you to maximize space utilization and have the software supply product location information and efficient order picking routes.
4. Look for Air Space Above Existing Operations
In many facilities there is unused space in the areas above stock room shelving, pick rack modules, assembly and packing areas, shipping and receiving docks, etc. Installing a mezzanine over these areas or extending the existing racks to higher levels can add significant usable space to your facility.
5. Review your Storage Equipment and Systems
The overall goal would be to increase storage density by looking for alternative storage options such as: closer shelf spacing; smaller bin storage sizes; converting from conventional shelving to drawer cabinets or drawers in shelving; using product specific racking for special items, etc.
In the upcoming posts, I will look at some of these ideas in more detail and offer specific ideas to help you create space where none seemed to exist before.